The European Commission requests Spain to change what is considered a discriminatory real estate tax

In its monthly package of infringement decisions, the European Commission is pursuing legal action against Member States for failing to comply properly with their obligations under European Union law and this month in the case of Spain, the EU wants the country to amend what they consider a discriminatory real estate tax.

The European Commission has requested that Spain amends its tax provisions for certain real estate sales, as under Spanish law, capital gains from the sale of a permanent residence are exempt for tax, if the funds are used to acquire another permanent residence.

The European Commission believes that this part of the law is discriminatory for property owners that are not permanent residents in Spain, and this has been reflected in monthly package of infringement decisions, which is the second step in infringement proceedings after the submission of a request for information by a formal notice.

The EU executives argue that the exemption for which the proceeds obtained from the sale or transfer of the principal residence is not taxable if reinvested in a new home, it applies only to residents in Spain, causing a discriminatory act to non-residents, incompatible with the fundamental freedoms enshrined in the EU Treaties.

The European Commission has formally requested Spain to meet the demands of Brussels and to report in two months on the measures taken to comply.  If the Spanish government does not comply with the request, the Commission may refer the case to the Court.

For more information, you can read the document MEMO/12/708 of the European Union.

• By Surestates
• Marbella and Costa del Sol Property News.
• 1 Jan 1970